Currency analyst

Key volatile events for the near-time period

The FOMC meetings

The next two FOMC meetings are scheduled for November 1–2 and December 13–14. There is a chance of rate hike at the upcoming meetings, especially at the latter.

US presidential elections

Donald Trump and Hillary Clinton are entering final straight to the White House. The last presidential debates will be held this week on October 19. The US presidential election is scheduled for Tuesday, November 8, 2016. The election results may heavily influence financial markets. Some analysts believe that a Donald Trump presidency could cause dollar to rise. A stronger US currency is generally negative for all commodities.

OPEC meeting

On September 28 in the course of the International Energy Forum held in Algeria the Organization of the Petroleum Exporting Countries agreed to reduce output to a range of 32.50 million barrels per day to 33.0 million bpd. But the delicate and critical issue of how much each of the 14 OPEC members will actually produce was left aside. The share of each member will be defined by the High Level Committee at OPEC’s annual meeting scheduled for November 30, 2016. The Algeria agreement boosted market sentiments and commodity prices rallied.

BOE, BOJ, RBA Monetary Policy Statements

The first week of November is expected to be extremely volatile, as there will be not only the FOMC meeting, but also monetary policy announcements of three major central banks.

The week will be opened with BOJ meeting scheduled for November 1. In the last speeches, Bank of Japan Governor H. Kuroda maintained its upbeat view on the national economy. He also claimed that the bank is ready to maintain its ultra-loose monetary policy for as long as needed to reach the long-cherished 2% inflation target. So, with current yen gradual appreciation and low pace of Japan’s economy we should not expect any tightening from BOJ.

Then, there will be the Bank of England’s meeting scheduled for November 3. At the last meeting held in September, all 9 MPC members took the wait-and-see approach by voting not to change interest rate. The opinion over the possibility of rate hike or cut is divided. With economy looking healthier after the Brexit vote than expected, cheap money launched for banks, pound’s precipitous depreciation some suggest that BOE’s officials will raise rate this time – although others forecast a cut may still arrive if board decides that economy will need additional stimulus. But there is a great probability that the BOE will sit tight on interest rate in November waiting to hear Chancellor Philip Hammond coming up with Autumn Statement.

On November 1 we will also hear the Reserve Bank of Australia’s rate statement. At the last meeting the RBA’s senior officials decided to keep interest rate on hold. We will be waiting for the RBA’s minutes coming this Tuesday to know the intentions of the board members. If the RBA’s officials decide that Australian economy needs additional stimulus, they may undertake additional easing measures.  

Italian referendum

A constitutional referendum is planned to be held in Italy on Sunday 4 December 2016. Voters will be asked whether they approve the amendment of the Italian Constitution to transform the Senate of the Republic into a "Senate of Regions" composed of regional councilors and mayors. Once it’s approved, the Senate’s authority will be drastically curbed, and the Italian government with its minister in charge will be given a free rein. Some people believe that it’s going to produce an effect of a “Brexit” like nature, because Mateo Renzi tied the results of the referendum with his own political career. If the constitutional reform is not approved by Italians, it will leave the door open for the next election. In the rise of immigration crisis and numerous Eurozone problems, Five Star Movement, a party mainly composed of political novices could win the next race. 

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